EnBW's first green bond 'oversubscribed'

GERMANY: Utility-developer EnBW has placed its first green bond on the capital market.

EnBW plans to invest the proceeds from the green bond in wind power, solar PV and e-mobility
EnBW plans to invest the proceeds from the green bond in wind power, solar PV and e-mobility

The €500 million, 15-year bond, which had a coupon of 1.875%, was "oversubscribed within hours", the company stated.

Proceeds from the bond will be used to fund investments in wind power, solar PV and e-mobility, it added.

Chief financial officer, Thomas Kusterer, said: "The restructuring of our company towards renewable energies and intelligent infrastructure solutions is a core part of our strategy."

EnBW expects the bond to be rated A3 by Moody’s and A by S&P.

It also stated that green bonds and clean energy investment was growing in popularity, adding: "More and more institutional investors prefer to invest in sustainable financial assets".

In a report in April 2018, WindEurope noted that green bonds were becoming more popular as an alternative source of debt and were helping risk-averse institutional investors gain access to the wind sector.

Last year, €17.5 billion was raised through green bonds — more than the amount raised through the last three years combined.

Several energy companies have used green bonds in the last 18 months to boost investment in wind power:

  • UK utility SSE issued a €600 million green bond in August 2017 to refinance its portfolio of onshore wind farms;
  • German company Innogy raised €850 million to refinance five wind farms through a green bond in October 2017;
  • French utility Engie issued a €1 billion green hybrid bond to fund renewable energy or energy efficiency projects, as well as research and development in these areas in January 2018;
  • And Iberdrola has launched a €750 million public green bond scheme to finance or refinance its East Anglia One project.

EnBW currently has 961MW of installed wind power capacity according to Windpower Intelligence, the research and data division of Windpower Monthly.

This portfolio includes both onshore and offshore projects and is mostly located in the company’s native Germany, as well as in Turkey. EnBW is also developing wind farms in the US and Sweden.

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